Analyzing ThyssenKrupp (OTCMKTS:TKAMY) and Commercial Metals (NYSE:CMC)

Commercial Metals (NYSE:CMC) and ThyssenKrupp (OTCMKTS:TKAMY) are both mid-cap basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, dividends, risk, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Commercial Metals and ThyssenKrupp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Commercial Metals	0	4	8	0	2.67
ThyssenKrupp	1	1	1	2	2.80

Commercial Metals currently has a consensus target price of $72.70, indicating a potential downside of 8.68%. Given Commercial Metals’ higher possible upside, research analysts plainly believe Commercial Metals is more favorable than ThyssenKrupp.

Earnings & Valuation

This table compares Commercial Metals and ThyssenKrupp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Commercial Metals	$7.80 billion	1.13	$84.66 million	$3.88	20.52
ThyssenKrupp	$36.31 billion	0.21	$514.57 million	$1.08	11.57

ThyssenKrupp has higher revenue and earnings than Commercial Metals. ThyssenKrupp is trading at a lower price-to-earnings ratio than Commercial Metals, indicating that it is currently the more affordable of the two stocks.

Dividends

Commercial Metals pays an annual dividend of $0.72 per share and has a dividend yield of 0.9%. ThyssenKrupp pays an annual dividend of $0.11 per share and has a dividend yield of 0.9%. Commercial Metals pays out 18.6% of its earnings in the form of a dividend. ThyssenKrupp pays out 10.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Commercial Metals has increased its dividend for 4 consecutive years. Commercial Metals is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

86.9% of Commercial Metals shares are owned by institutional investors. 0.6% of Commercial Metals shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Commercial Metals has a beta of 1.49, meaning that its stock price is 49% more volatile than the S&P 500. Comparatively, ThyssenKrupp has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Profitability

This table compares Commercial Metals and ThyssenKrupp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Commercial Metals	5.46%	11.43%	6.31%
ThyssenKrupp	1.83%	9.21%	3.32%

Summary

Commercial Metals beats ThyssenKrupp on 13 of the 18 factors compared between the two stocks.

About Commercial Metals

Commercial Metals Company manufactures, recycles, and fabricates steel and metal products, and related materials and services in the United States, Poland, China, and internationally. It operates through two segments, North America and Europe. The company processes and sells ferrous and nonferrous scrap metals to steel mills and foundries, aluminum sheet and ingot manufacturers, brass and bronze ingot makers, copper refineries and mills, secondary lead smelters, specialty steel mills, high temperature alloy manufacturers, and other consumers. It also manufactures and sells finished long steel products, including reinforcing bar, merchant bar, light structural, and other special sections, as well as semi-finished billets for rerolling and forging applications. In addition, the company provides fabricated rebar used to reinforce concrete primarily in the construction of commercial and non-commercial buildings, hospitals, convention centers, industrial plants, power plants, highways, bridges, arenas, stadiums, and dams; sells and rents construction-related products and equipment to concrete installers and other businesses; and manufactures and sells strength bars for the truck trailer industry, special bar steels for the energy market, and armor plates for military vehicles. Further, it manufactures rebars, merchant bars, and wire rods; and sells fabricated rebars, wire meshes, fabricated meshes, assembled rebar cages, and other fabricated rebar by-products to fabricators, manufacturers, distributors, and construction companies. The company was founded in 1915 and is headquartered in Irving, Texas.

About ThyssenKrupp

thyssenkrupp AG operates as an industrial and technology company in Germany and internationally. It operates through five segments: Automotive Technology, Decarbon Technologies, Materials Services, Steel Europe, and Marine Systems. The Automotive Technology segment offers components, systems, and automation solutions for vehicle manufacturing, such as axle assembly, body in white, camshafts and electric engine components, dampers, dies, springs and stabilizers, crankshafts and conrods, steering, and undercarriages. The Decarbon Technologies segment provides slewing bearings and rings, green ammonia and methanol, chemical and cement plants, high pressure processing, and refinery services, as well as green hydrogen. The Marine System segment manufactures submarines, naval services, and naval surface vessels. The Material Services segment offers 3D-printing/additive manufacturing, alloys, infrastructure project and services, industrial minerals, logistics services, metals, nonferrous metals, plastics, rolled steel, special ores, and stainless steel. The Steel Europe segment manufactures composite materials, electrical steel, hot strips, organic coated strips and sheet, packaging steel, precision steel strip, and sheet and coated products. thyssenkrupp AG was founded in 1811 and is headquartered in Essen, Germany.